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The latest monthly Reuters Tankan survey showed on Wednesday, the Japanese business morale deteriorated further in May, as lockdown induced economic deadlock weighed down on the firms’ sentiment.

Key findings

“The survey showed both manufacturers and service-sector firms expected to see an even sharper fall in business sentiment in the three months ahead, at minus 51 and minus 48 in August, respectively.

Except for the information/communications sector, all industry categories across the manufacturing and the service sector were pessimistic about business conditions.

Reuters polled 499 large- and mid-sized non-financial companies, of which 236 firms responded on condition of anonymity.

The depth of despair in the business sector reinforces analysts’ expectations that Japan is on course for its worst postwar economic slump, with a Reuters poll forecasting an annualized GDP decline of 22% in the current quarter.”